Apple in hot water over iTunes

Few days after reaching numero uno position and becoming the most valuable technology company in terms of market capitalization, Apple has joined the infamous club  of big companies –  including IBM, Intel and Microsoft – which got  investigated for antitrust allegations by United States Department of Justice(DoJ). The Department of Justice is  investigating Apple over antitrust practices used by the company’s iTunes Music Store.

The investigation is into allegations that Apple used their domination of the digital music market to dissuade the major record companies such as Universal, Sony, Warner Bros, EMI in order to prevent them from giving exclusives to Apple’s biggest competitor, Amazon which runs the Amazon MP3 Store.  Apple’s iTunes holds a 60 to 70 percent share of all digital music sales in the U.S compared to  Amazon’s 7 to 8 percent share.

The antitrust investigation has reached out to Universal, Sony, Warner Bros, EMI and several music services that compete with iTunes. DoJ has been asking preliminary questions about Apple’s pricing and competition, particularly with regard to Amazon’s music store.

In recent years Apple has eased their stronghold over digital music sales  by letting competitors like Rhapsody and Pandora develop applications for Apple devices like the iPhone. It is not the first time that its Music store strategies have gotten Apple into trouble. In 2008, Apple agreed to lower prices on iTunes tracks sold in the UK as a result of a European Union Competition Commission inquiry that had begun in 2005.